Imagine a world where millions of dollars can flow through the system daily, a world where all these exchanges can happen anonymously, where there are no police, courts and extradition laws. Perfect spot for people to steal and launder money?

You bet, says Anand Sastry in E Commerce Times:

"Traditional markets have regulatory oversight - activities that might be criminal are more difficult to achieve due to protections put in place by regulators, for example, recording and record-keeping, both to ensure taxes are paid as well to work as an anti-money laundering measure (i.e., to help track point of origin). While it is difficult to know for certain how and if transactions within virtual communities are recorded, it is likely that there is little or no record keeping being done. If that's the case, these exchanges are an anonymous, international channel for transferring currency with little or no oversight. That's problematic, to say the least.

"Even more concerning is the potential for deliberate market manipulation. While deliberate manipulation of a market like the New York Stock Exchange is illegal, manipulation of virtual markets such as these may not be - and the likelihood of lax record keeping would make deliberate manipulation difficult to spot from the outset.

"Wholesale exploitation of the markets aside, there's also petty theft to worry about. Profiteers can use the games themselves as vehicles for more "personal" forms of theft."

Andrea Vanina Arias from Emory University Law School says that despite the daily occurrence of theft within Massively-Multiplayer Online Role-Playing Games and virtual worlds, it remains unregulated. And yet, she says, it desperately needs to be regulated, particularly with the rise of virtual theft. Her paper, Life, Liberty and the Pursuit of Swords and Armor: Regulating the Theft of Virtual Goods raises a number of issues around virtual theft.

Like, for example, jurisdiction ("Virtual good thefts in particular pose two potential jurisdictional dilemmas: (a) because the theft occurs online, in which territory would the prosecution have to establish the theft took place? and (b) if the theft is committed by a foreigner, how would the state obtain jurisdiction over the accused?") and concerns about identifying perpetrators who operate behind the mask of anonymity.

She says it might be difficult but the law can still be used to bring perpetrators to justice:

"The Internet has redefined society's ability to communicate and interact. Criminals can now commit crimes that past legislators never envisioned were possible. Current rules, however, do not have to change. Instead, current and future legislators should reinterpret the boundaries of old rules to accommodate changes in society evoked by the Internet. After all, crime, irrespective of the setting, is still crime."